World’s Largest Sovereign Wealth Fund Generated 7.6% Return in 2014
Norges Bank Investment Management (NBIM), the manager of Norway’s sovereign wealth fund, posted a 7.6% return in 2014 versus a 15.9% return in 2013. The highest performing asset class was real estate at 10.4%, followed by listed equities at 7.9%. Fixed income performed at 6.9%. Compared to previous years, the relative returns in fixed income and equities were slightly weaker. This can be attributed to the sovereign fund’s higher weight toward European equities (which could be a boon for 2015 due to the European Central Bank’s bond buying plan) and short duration investments in the fund’s fixed income allocation. The sovereign wealth fund pulled back from U.S. Treasuries, while increasing allocation to Japanese and U.K. government bonds. Norway’s sovereign wealth fund has invested in 9,134 companies at the end of 2014, compared to 8,213 companies in 2013. The sovereign wealth fund added equity allocation to Mauritius, Nigeria and Ghana in 2014.
As of December 31, 2014, Norway’s sovereign wealth fund owns 7% of U.S. asset manager BlackRock.
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